SoftBank in talks to invest $25 bln directly in OpenAI- FT

Investing.com-- SoftBank Group Corp. (TYO:9984) is in talks to invest up to $25 billion directly into OpenAI, the Financial Times reported on Thursday, in a deal that could make the Japanese technology giant OpenAI’s biggest financial backer. 

The talks are ongoing and the amount Softbank (OTC:SFTBY) could invest in OpenAI still has not been cemented, the FT report said, citing a person familiar with the matter. 

The report comes just days after OpenAI and Softbank announced Project Stargate- a $500 billion venture involving several major U.S. technology firms, which will build more AI infrastructure in the U.S.

Softbank will contribute about $15 billion to Stargate, as will OpenAI. Softbank’s investment in OpenAI could also cover its contribution to Stargate, the FT report said.

Any investment above $15 billion will make Softbank OpenAI’s biggest financial backer after Microsoft Corporation (NASDAQ:MSFT), which had first begun investing in the AI start-up in 2019. 

Softbank CEO Masayoshi Son had vowed to ramp up the conglomerate’s investment in AI, from energy generation, to chipmaking and robotic applications.

Softbank is exposed to the AI boom through its ownership of British chip designer Arm Holdings (NASDAQ:ARM). The company had also earlier flagged plans to develop its own generative AI.

The FT report also comes after the release of DeepSeek R1- a Chinese AI model- sparked questions over the need for outsized investment in AI infrastructure.

DeepSeek appeared to be able to match rivals such as GPT-4 in performance while claiming to use older hardware and a substantially smaller production budget. 

Concerns over DeepSeek sparked deep losses in global tech valuations this week. 

Softbank wiped out nearly 12% of its market capitalization in the past three days.